b. Suppose GDP equals $10 trillion, consumption equals $6 trillion, the government spends $2 trillion and has a budget deficit of $500 billion. Given the above, find the following: public saving, taxes, private saving, national saving, and investment. Show your work!

b. Suppose GDP equals $10 trillion, consumption equals $6 trillion, the government spends $2 trillion and has a budget deficit of $500 billion. Given the above, find the following: public saving, taxes, private saving, national saving, and investment. Show your work!

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4PA

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Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

OR
b. Suppose GDP equals $10 trillion, consumption equals $6 trillion, the government spends $2
trillion
and has a budget deficit of $500 billion.
Given the above, find the following: public saving, taxes, private saving, national saving, and
investment.
Show your work!

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